BUSINESS DIGEST: FRIDAY, FEBRUARY 19, 1988

Published: February 19, 1988

Companies

Lord, Day & Lord will merge with a smaller New York law firm. Lord, Day is one of the nation's oldest firms but has suffered from recent defections of top partners. Its merger with Barrett Smith Simon & Armstrong is the largest in New York legal history, forming a firm of 170 to 180 lawyers. The deal between the two middle-sized law firms reflects pressure from clients to match the ''mega-firms'' in offering larger staffs capable of handling bigger deals and more diverse services. [ Page A1. ]

Ford reported a profit of $4.6 billion for 1987, up 39.4 percent from last year and the largest ever for an automobile company. But its fourth-quarter earnings, which rose 19 percent, were lower than analysts had expected, and Ford stock fell by $2.25, to $42.25. The record annual earnings reflect increased sales of cars and trucks and success in cutting costs. [ D1. ] Workers at Ford's 22 British plants ratified a two-year contract, ending an 11-day strike. [ D4. ]

T. Boone Pickens wants to buy up to 15 percent of Texaco. The Texas oilman and corporate raider said he would support the efforts of Carl C. Icahn, the company's largest shareholder, to purge Texaco's bylaws of anti-takeover measures. [ D1. ]

American Standard's board approved a recapitalization that it said was ''financially superior'' to the cash offer of $65 a share, or $2.1 billion, from Black & Decker. Under the plan, stockholders can exchange their shares for a package of cash and securities that analysts said might be worth $67 a share. [ D1. ]

TMIC Insurance had severe problems as early as spring 1986, according to the California official appointed to manage it. Joseph Waldbaum said that when he recommended that May that the company be liquidated, he was ignored. [ D1. ]

Eaton's AIL division will pay $6 million to settle accusations that it falsified payment requests on Air Force contracts. [ D5. ] The Economy

President Reagan sent Congress a $1.09 trillion budget devoid of past ideological fervor, in keeping with a bipartisan agreement reached last year. [ A1. ] The Administration continued to send signals to the Federal Reserve to steer clear of clamping down on economic growth and pushing up interest rates during 1988. [ D19. ]

U.S. factories, mines and utilities operated at 82.2 percent of capacity last month, unchanged from December's levels. That is the nation's highest operating rate in almost eight years. [ D3. ] International

The White House will have more time to present the Canadian trade pact to Congress for final approval, the Administration and Democratic Congressional leaders agreed. The agreement assures that a final vote on the pact will be taken this year. [ D1. ]

Brazil expects to start negotiations on new I.M.F. borrowing next month and to conclude an agreement by June. [ D3. ] Markets

The Dow Jones industrial average fell below 2,000 as many investors remained on the sidelines. The Dow closed down 14.58 points, at 1,986.41. [ D6. ]

Bond prices rose modestly after three days of declines. Analysts said the gains were due mostly to short-term trading strategies, rather than any substantial increase in demand. [ D12. ]

The Fed will provide changes in two money supply figures each week, rather than monthly, an announcement that surprised economists. [ D12. ]

The dollar closed moderately higher in New York. Gold fell $3.20 in New York, to $442.80 an ounce. [ D13. ]